The Wales Audit Office was created on 1 April 2005 following the passing of the Public Audit (Wales) Act 2004. That Act brought together the former offices of the Audit Commission in Wales (ACiW) and the National Audit Office (NAO) in Wales into one body headed by the Auditor General for Wales (AGW).

Previously the role of the NAO in Wales was to audit, on behalf of the AGW, the National Assembly and its sponsored and related public bodies. The ACiW was responsible for auditing and inspecting local Welsh public services. Both bodies also carried out value for money studies and reported on their findings.

Wales now has a single audit and inspection body, responsible annually for the audit of over £19 billion of public expenditure at all levels of administration.